Chapter 4: Research Methods

Chapter 4

Research Methods

Chapter nos. Topics Page nos.

4. Research Methods

• Observations 02
• Survey Method 05
• Experimentation 08
• Secondary Data 11

OBSERVATION

Definition
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• It is the process of recognizing people, objects and occurrences rather than

asking for information.
• Instead of asking consumers what brand they buy the researchers arrange to
observe what products are brought.
• E.g. a large food retailer tested a new slot-type shelf arrangement for canned
foods by observing shoppers as they used the new shelves.

Advantages of observation method

1. When the researcher observes and records events, it is not necessary to rely
on the willingness and ability of respondents to report accurately.
2. The biasing effects of interviewers or their phrasing of the questions is either
eliminated or reduced.
3. Data collection by observation is more objective and hence more accurate.

Disadvantages of observation method

1. Researchers have recognized the merits of observations opposed to

questioning, yet the vast majority of researchers continue to rely on the use of
a questionnaire.
2. The most limiting factor in the use of observation is the inability to observe
things such as attitudes, motivation, etc.
3. Events of more than short-term duration such as a family’s use of leisure time
and personal activities such as brushing of teeth are better discussed with
questionnaires.
4. In some observational studies it is impractical to keep the respondent from
knowing that they are being observed. This results in a biasing effect.
5. Cost is another major disadvantage.
E.g. To observe the customers who come in to buy canned milk, an observer has
to wait for the customers to come in and buy the milk. The unproductive time is
an increased cost.

METHODS OF OBSERVATION

Observational studies can be classified on five bases:

1. Whether the situation in which the observation is made is natural or contrived
2. Whether the observation is obtrusive or unobtrusive.
3. Whether the observation is structured or unstructured
4. Whether the factor of interest is observed directly or indirectly
5. Whether observers or mechanical means makes observations.
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Direct observations

• When an observer is stationed in a grocery store to note how many

different brands of canned soup each shopper picks up before
selecting one, there is unobtrusive, direct observation in a natural
situation.
• If a camera is positioned to record shopping actions, observation is by
mechanical means
• If the observer counts the specific cans picked up, the observation is
structured.
• If the observer has to go about observing how shoppers go about
selecting a brand of soup, the situation is unstructured.

Structured direct observation

• It is used when the problem at hand has been formulated precisely enough
to enable researchers to define specifically the observations to be made
• E.g. Observers in a supermarket might note the number of soup cans
picked up by each customer. A form can easily be printed for simple
recordings of such observations.
• Not all observations are as simple as the above but experiments have
shown that even observers with a different viewpoint on a given question
tend to make similar observations under structured conditions.

Unstructured, direct observation

• Observers are placed in situations and observe whatever they deem

significant.
• E.g. In an effort to find ways of improving the service of a store, observers
may mingle with customers in the store and look for activities that suggest
service problems. No one can observe everything that is going on, hence
the observer must select certain things which he can make a note of.
Customers standing at a counter with annoyed faces may be observed as
irritated because of the service or lack of it.

Contrived observation

• When researchers rely on natural direct observation it results in a lot of

wasted time while they wait for the desired events to take place. To reduce
this, it may be more desirable to contrive situations so that observations
may be made more efficiently.
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• E.g. To study the bargaining between an automobile salesman and a

customer, the observer can pose as a customer and take various
bargaining attitudes from the most-eager-to-buy to the toughest price
seeking. In each case the observer notes the salesperson’s response. As
long as the sales person believes the researcher to be a bonafide
customer, there is no bias in the observation.
• Contrived observations often have a validity and economic advantage.

Mechanical observation

A number of methods and devices have been developed for making such
observations.

a) Audimeter- used by the A C Nielsen company to record when

television and radio sets are tuned on and the stations to which they
are tuned.
b) People meter- a device that can be held in the hand and has a number
for each member of the household, which he/she is asked to punch
when viewing TV.
c) Psycho galvanometer- measures minute emotional reactions through
changes in the rate of perspiration. It is almost like a lie detector.
d) Eye camera- used to record the movements of the eye.

Indirect observation

One type of observation focuses on the physical traces left by the factors of interest.
These traces are of two types;
1. Accretions left
2. Erosion

3. Accretions involve studies such as the observation of liquor bottles in th

4. Erosion

• Accretions involve a trash to eliminate the liquor consumption in cities

without liquor stores.
• Erosion observations are less frequent. An example would be the study
of a relative readership of different sections of an encyclopedia by
measuring the wear and tear on the pages.
• Observation of the results of past actions will not bias the data if done
on a one-time basis.
• E.g. Pantry audits determine what purchases have been made in the
past.

Observation of records
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• Whenever researchers use data collected for another purpose, they are
employing the observation method in a manner similar in character to the
observation of physical trace
• The records of previous activities such as population census are physical
traces of previous periods.

Survey method
Definition

Survey research is one of the most important areas of measurement in applied

social research. The broad area of survey research encompasses any
measurement procedures that involve asking questions of respondents.

Types of surveys

• Surveys can be divided into two broad categories: the questionnaire and
the interview.
• Questionnaires are usually paper-and-pencil instruments that the
respondent completes.
• The interviewer based on what the respondent says completes interviews.

Questionnaires

Mail survey: when a respondent receives a questionnaire by mail it is known as

mail survey.

Advantages:
• They are relatively inexpensive to administer.
• You can send the exact same instrument to a wide number of people.
• They allow the respondent to fill it out at their own convenience.

Disadvantages:
• Response rates from mail surveys are often very low.
• Mail questionnaires are not the best vehicles for asking for detailed written
responses.

Group-administered questionnaire
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• A sample of respondents is brought together and asked to respond to a

structured sequence of questions.
• Traditionally, questionnaires were administered in-group settings for
convenience.
• The researcher could give the questionnaire to those who were present
and be fairly sure that there would be a high response rate
• If the respondents were unclear about the meaning of a question they
could ask for clarification.
• And, there were often organizational settings where it was relatively easy
to assemble the group (in a company or business, for instance).

Interviews

Interviews are a far more personal form of research than questionnaires

Personal interview
The interviewer works directly with the respondent

Advantages
• The interviewer has the opportunity to probe or ask follow-up questions.
• Interviews are generally easier for the respondent, especially if what is
sought is opinions or impressions

Disadvantages
• Interviews can be very time consuming and they are resource intensive.
• The interviewer is considered as a part of the measurement instrument
and interviewers have to be well trained in how to respond to any
contingency.

Telephone Interview

Telephone interviews enable a researcher to gather information rapidly.

Advantages
• They allow for some personal contact between the interviewer and the
respondent.
• They allow the interviewer to ask follow-up questions

Disadvantages
• Many people don't have publicly-listed telephone numbers. Some don't
have telephones.
• People often don't like the intrusion of a call to their homes.
• Telephone interviews have to be relatively short or people will feel imposed
upon.
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Selecting the survey method

Selecting the type of survey you are going to use is one of the most critical
decisions in many social research contexts. You have to use your judgment to
balance the advantages and disadvantages of different survey types.

Following are the issues that the researcher must look into before conducting a
research.

Sampling issues

• What data is available? What information do you have about your

sample? Do you know their current addresses? Their current phone
numbers? Are your contact lists up to date?
• Can your respondents be located?
• Who is the respondent in your study? If the specific individual is unavailable is
the researcher willing to interview another?
• Are response rates likely to be a problem?

Questions

• What types of questions can be asked? Are they personal or require a

detailed answer?
• Can question sequence be controlled?
• Your survey is one where you can construct in advance a reasonable
sequence of questions? Or, are you doing an initial exploratory study
where you may need to ask lots of follow-up questions that you can't
easily anticipate
• Cost is often the major determining factor in selecting survey type. You
might prefer to do personal interviews, but can't justify the high cost of
training and paying for the interviewers. You may prefer to send out an
extensive mailing but can't afford the postage to do so.
• Do you have the facilities (or access to them) to process and manage your
study? In phone interviews, do you have well-equipped phone surveying
facilities? For focus groups, do you have a comfortable and accessible room
to host the group? Do you have the equipment needed to record and
transcribe responses
• Some types of surveys take longer than others. Do you need
responses immediately (as in an overnight public opinion poll)? Have
you budgeted enough time for your study to send out mail surveys and
follow-up reminders, and to get the responses back by mail? Have you
allowed for enough time to get enough personal interviews to justify

Types of questions
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Survey questions can be divided into two broad types: structured and unstructured

Dichotomous Questions
When a question has two possible responses, we consider it dichotomous.
Surveys often use dichotomous questions that ask for a Yes/No, True/False
or Agree/Disagree response
Eg please enter your gender

Male female

Likert response scale

An opinion question is asked on a 1-to-5 bipolar scale (it's called bipolar
because there is a neutral point and the two ends of the scale are at opposite
positions of the opinion):

The batting order of the Indian team shold be changed

1 2 3 4 5
Strongly agree disagree neutral agree strongly disagree

Semantic differential
Here, an object is assessed by the respondent on a set of bipolar adjective
pairs (using 5-point rating scale).

EXPERIMENTATION
Experiments are frequently conducted to determine what effect advertising of an
undesirable fact would have on consumer awareness of that fact. Advertising was
conducted, and a measurement of consumer awareness was made. More
advertising was followed by another measurement. As a consistent growth in
consumer awareness took place, one would have confidence in the conclusion that
the advertising was effective. Experiments are much more effective than descriptive
techniques in establishing cause-effect relationships.

Definition of Experiment

It refers to that research process in which one or more variables are manipulated
under conditions that permits the collection of data that show the effects, if any, of
such variables in unconfused fashion.
Under most circumstances, experiments must create “artificial “ situations. Artificiality
in general is the essence of the experimental method, for it gives researchers more
control over the factors they are studying. If they can control the factors present in a
given situation, they can obtain more conclusive evidence of cause and effect
relationships between any two of them. Thus, the ability to set up a situation for the
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express purpose of observing and recording accurately the effect on one factor when
another is deliberately changed permits researchers to prove or disprove hypotheses
that they otherwise could only partially test.

Selected Experimental Designs

The researcher has an hypothesis that if an experimental variable (e.g. advertising,

shell display, training) is applied to an experimental unit (e.g. a group of consumers,
a store, some sales representatives), it will have a measurable effect (e.g. the
number remembering the brand name, units sold, calls made). The following are
most of the common designs for marketing experiments.

♦ “After Only” Design.

This is the simplest of all experimental designs. As the “after only” name suggests,
this design consists of applying the experimental variable (e.g. advertising) to an
experimental group (e.g. consumers) and measuring the dependent variable (e.g.
recall of brand name) after, and only after, the application of the experimental
variable.
♦ “Before-After “ Design
In this design, the experiments measure the dependent variable before exposing the
subjects to the experimental variable and again after exposure to the experimental
variable. The difference between the two is considered to be a measurement of the
effect of the experimental variable.
♦ “Four-Group—Six Study” Design
In this case, when the investigator is obtaining information in an undisguised manner
directly from persons, the “before-after with control group” design is inadequate. Both
the experimental and control groups are apt to be influenced, and in different ways,
by the “before” measurement. To over these difficulties, this design is established as
the ideal where there is interaction between the respondent and the questioning
process. This design helps the researchers measure the size of the “interaction”
effect.
The design has little practical value and the use of “before” measurements also
creates statistical difficulties in testing the significance of results.
♦ “After only with Control Group” Design”
In the “four group—six study” design, it is possible to determine the effect of the
experimental variable from only two groups i.e. experimental group 2 and control
group 2. The difference between the “before” and “after” measurements of control
group 2 is the result of uncontrolled variables.
The “before-after” design permits an analysis of the process of change, whereas the
“after only” design does not. . Thus, individual respondents can be identified and
their reactions noted in a “before-after” study]
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The “after only with control group” design fits many marketing problems and is easy
to use. Many promotional devices can be tested this way. Frequently, product tests
are also of the “after only with control group “ design e.g. General Motors ran such
an experiment to determine the desirability of nylon cord tyres as compared to the
traditional rayon cord tyres.
Ex Post Facto Design
One variation of the “after-only” design is called the ex post facto design. This differs
from the “after only” design because the experimental and control groups are
selected after the experimental variables is introduced instead of before.
One advantage is that the test subjects cannot be influenced, pro or con, toward the
object be knowing they are being tested, since they are exposed to the experimental
variable before being selected for the sample.
Another advantage of this method is that it permits the experimenter to let the
experimental variable be introduced realistically and to control only observations.
This is useful in advertising tests, which use commercial media.
E.g. A T.V public service announcement designed to inform consumers about the
pro and cons of nuclear energy. This could be broadcast over cable T.V only, and
interviewers could then determine with some objective accuracy whether a home
had a cable TV or not.
Continuous Diary Panel Design
In most marketing research experiments, the subjects (individuals, dealers) from
whom information is to be obtained are selected by some sampling procedure. After
the information required by the product is obtained, these subjects are not “used”
again. In some instances, however, a sample is recruited, and information is
obtained from the members continuously or at intervals over a period of time. A
permanent or fixed sample of this type is called a panel. Panels are used for both
exploratory and conclusive studies.
Factorial Designs
In the above designs, a single experimental variable with usually one variable was
considered. It is possible to test several “levels” of the experimental variable
For example several different ads could be tested, each with a separate
experimental group. All but one group alternatively could be considered as control
groups against which to compare the experimental group, or an additional control
group not exposed to any advertising could be used to protect against possible
negative effects of all ads.
Factorial designs permit the experimenter to test two or more variables at the same
time and not only determine the main effects of each of the variables, but also to
measure the interaction effects of variables.

SECONDARY DATA
Secondary data are data that were developed for some purpose other than helping
to solve the problem at hand. Secondary data can be gathered quickly and is
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inexpensive as compared to primary data. Even when reports or publications are

ordered, the time involved is generally less than the time required to collect original
data.

A thorough search on secondary data will often provide sufficient information to

resolve the problem. In some cases where the secondary data cannot solve the
problem, they can often help to structure the problem and eliminate some variables
from consideration. Or, it may be possible to utilize the secondary data in conjunction
with primary data. Secondary data can provide a complete or partial solution to many
problems and help in structuring other problems. They tend to cost substantially less
than primary data and can be collected in less time also.

Problems Encountered with Secondary Data

Before secondary data are applied to a particular marketing problem, their relevance
and accuracy must be assessed.

Relevancy refers to the extent to which the data fits the information needs of
research problem. Even when the data covers the same general topic as that
required by the research problem, they may not fit the requirements of the problem.
Three general problem’s reduces the relevance of data that would otherwise be
useful. They are:
1) There is often a difference in the units of measurement. E.g. many retail
decisions require detailed information on the characteristics of the population
within their trade area. However, the available population statistics may focus
on countries, cities or census tracts that do not match the trade area of the
retail outlet.
2) The second general problem that can reduce relevancy of secondary data is
the definition of classes. E.g. a manufacturer may have a product that appeals
to children 8 to 12 years old. If available secondary data are based on age
categories 5 to 9 and 10 to 14, the firm will have a hard time utilizing it.
3) The final major factor that is affecting relevancy is time. Generally, research
problems require current, if not future, data. Most secondary data, on the
other hand, have been in existence for some time. E.g. complete census
reports are not available for several years. Data are frequently collected one
to three years prior to its publication.

Accuracy is the second major concern of the user of secondary data. The real
problem is not inaccuracy, it is the difficulty of determining how inaccurate the data is
likely to be.

While using secondary data, the original source should be used if possible. This is
important because, the original report is generally more complete than the second or
third reports. Secondly using original source allows the data to be examined in
context and may provide a better basis for assessing the competence and motivation
of the collector.
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Sources of Secondary Data

There are two general sources of secondary data – internal sources and external
sources. Internal data are available within the firm whereas external sources provide
data that are developed outside the firm.

Internal Sources

Internal sources include sales record, sales force reports, operating statements,
budgets, previous research reports and the likes. The most useful type of internal
information is generally sales data. But, unfortunately many companies do not collect
or maintain sales data in the manner that allows the researcher to tap their full
potential. Such records, if properly utilized, allows the researcher to isolate profitable
and unprofitable customers, territories, and product lines, to identify developing
trends and perhaps to measure the effects of manipulations of marketing mix
variables.

Internal data must be collected in a usable format and must be analyzed to be of

value. Many firms have useful but unutilized data. By changing the format of
collection forms (sales invoices, salesman call reports, etc) other useful data can be
often collected. They are available and inexpensive; internal data are the best
information buy.

External Sources

Numerous sources external to the firm may produce data relevant to the firm’s
requirements. There are four types of general external secondary information, they
are:
1) Trade associations
2) Government Agencies
3) Other published sources, and
4) Syndicated services

a) Trade Associations
Trade associations frequently publish or maintain detailed information on industry
sales, operating characteristics, growth patterns and the like. They may also conduct
special studies of factors relevant to their industry. Since trade associations have
good reputation for not revealing data on individual firms as well as good working
relationships with the firms in the industry, they may be able to secure information
that may be unavailable to other researchers. These materials may be published in
the form of annual reports or as special reports.
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b) Government agencies
Federal, state and local government agencies produce a massive amount of data
that is of relevance to marketers. The federal government maintains five major
agencies whose primary function is the collection and dissemination of statistical
data, they are:
a) Bureau of Census
b) Bureau of Labor Statistics
c) National Center for Educational Statistics
d) National Center for Health Statistics, and
e) Statistical Reporting Service, Department of Agriculture
There are also a number of specialized analytic and research agencies, numerous
administrative and regulatory agencies.

These sources produce two types of data

a) Statistics focused on people are produced. These include demographics, vital
and health statistics, labor and social conditions.
b) The second broad category focuses on economic activity – commerce,
finance, agriculture and the like.
Both types of data are widely used by business firms as an aid in decision-making.

The data available may be standardized, such as census data, or it may be in the
form of special reports. Census publications are one of the most widely used sources
of secondary data.

c) Other published Sources

There is virtually endless array of periodicals, books, dissertations, newspapers and
the like, that contain information relevant to marketing decisions.

d) Syndicated Services
A number of firms regularly collect data of relevance to marketers that they sell on a
subscription basis. Two types of syndicated services are widely used by marketing
researchers – channel information and omnibus surveys.

Channel information is available to the firm at four levels – manufacturers,

intermediaries, retailers and consumers.
A manufacturers sales and shipment are generally available only through the firms
own internal records. Therefore, although a firm can monitor its own activities at this
level, it can only infer the output of other manufacturing firms.
At the intermediary or wholesale level, several syndicated firms provide
information on the flow of products and brands to retail outlets.
Store audits provide data on the movement of brands through retail outlets.
At the consumer level, consumer panels provide data on both purchasing pattern
and media habits.

Omnibus surveys collect data that are useful to a number of subscribers from a
series of independent samples.
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